Commercial parlance test keeps hair oil concentrate classifiable as hair oil, while duty rate and provisional assessment go back for review.

Goods are to be classified according to their commercial or popular meaning in trade, and a hair oil concentrate remains classifiable as hair oil if it is understood and marketed that way and is perfumed by deliberate addition of essential oils. Applying the commercial parlance test and an earlier Tribunal view on a similar product, Kesvardhini Concentrate was held classifiable under Tariff Item 14F(II) for the relevant period, in favour of Revenue. The questions whether duty, if payable, was only at the small-scale rate and whether the assessments were provisional depended on the factual record and were remitted for fresh adjudication.

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Issues: (i) Whether Kesvardhini Concentrate was classifiable under Tariff Item 14F(II) of the Central Excise Tariff during the relevant period; (ii) Whether the demand of duty at the higher rate and the plea of provisional assessment required fresh determination.

Issue (i): Whether Kesvardhini Concentrate was classifiable under Tariff Item 14F(II) of the Central Excise Tariff during the relevant period.

Analysis: The product was meant for application to hair after dilution with vegetable oils and, on the record, had long been understood in trade and departmental documents as hair oil. Classification was therefore governed by the commercial parlance test, and the earlier Tribunal view treating a similar hair oil concentrate as classifiable as perfumed hair oil was applied. The product was also found to be perfumed by deliberate addition of essential oils.

Conclusion: The product was correctly classifiable under Tariff Item 14F(II) during the relevant period, in favour of Revenue.

Issue (ii): Whether the demand of duty at the higher rate and the plea of provisional assessment required fresh determination.

Analysis: The pleas that duty, if payable, was only at the small-scale rate and that the assessments were provisional depended on the factual record, correspondence, and approval documents. Those matters were not finally determined on the existing material and required reconsideration by the lower authority.

Conclusion: The questions of the applicable duty rate and whether the assessments were provisional were remitted for re-adjudication.

Final Conclusion: The classification of the product as hair oil under Tariff Item 14F(II) was upheld, but the duty computation and provisional assessment issues were sent back for fresh decision by the adjudicating authority.

Ratio Decidendi: Goods are to be classified according to their commercial or popular meaning in trade, and a product marketed and understood as hair oil remains so classifiable even if sold in concentrate form for dilution before use.

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